Reports to creditors and contributories - First report

April 2010

18.2 Official receiver’s duty to report to creditors and contributories

The official receiver is required at least once after the making of a winding-up or bankruptcy order to report to creditors on the proceedings and on the state of the insolvent’s affairs [note 1]. In a winding up the report is additionally sent to contributories but to avoid unnecessary repetition, this chapter will generally refer to the report as being one to creditors. "Creditors" means, in this context, creditors of the insolvent who are known to the official receiver [note 2]. Where someone states that they are a creditor or contributory, and they are not recorded in the proceedings as such, they should be asked to provide details in writing. This can either be on paper or in electronic form [note 3] and must be provided prior to a copy of the report being sent to them. Once such details have been received, they should be treated as a creditor.


18.3 Time limit for first report

The official receiver should, where possible, send out his/her report including, where appropriate, the notice convening a first meeting or that stating no meeting will be held. There is no statutory time limit within which the official receiver is required to issue a report to creditors, but The Insolvency Service aims to issue the majority of reports to creditors within 8 weeks of the making of the order [note 4]. Where little information is available at the time the report is drafted, for example due to the failure of the director/bankrupt to attend, the official receiver may later wish to send out a further report (see Part 2). If a statement of affairs is subsequently lodged, the official receiver must consider whether it is appropriate to send a further report (see paragraph 18.10). Whilst the issue of such reports is not subject to statutory or Service time limits, they should be issued in a timely manner.


18.3A Electronic delivery of report to creditors and use of websites

With effect from 6 April 2010 the official receiver is permitted to send his/her report to creditors by electronic means provided that the intended recipient has consented to electronic delivery and has provided an electronic address for delivery [note 5]. Where the official receiver issues a report to creditors by electronic means, the document must contain or be accompanied by a statement informing the recipient that they may request a hard copy  and providing a telephone number, email address and postal address for making such a request.  Where a hard copy of the report is requested, it must be sent within 5 business days of receipt of the request [note 6].

The official receiver may also satisfy his/her requirement to report to creditors by the report being available for viewing or downloading on a website [note 7]. The official receiver is required to notify creditors of the address of the website together with any password required to access or download the document. The notice given to creditors must also contain a statement informing the recipient of their entitlement to request a hard copy of the report  and specifying a telephone number, e-mail address and postal address to make such a request. Where a hard copy is requested this must  be issued within 5 business days of the receipt of the request. 

Where a notice to creditors is issued informing them of a website address where they can view the report to creditors, the report to creditors must be available on the website for a period of not less than 3 months after the date on which the notice was sent.


18.4 Report to be filed in court

With effect from  6 April 2010, the official receiver is no longer required to file a copy of the report to creditors in court in any case [note 8].


18.5 Relief from reporting where costs excessive

If the official receiver considers that the cost of reporting, having regard to the number of creditors (and/or contributories), their interest in the proceedings and the amount of assets available, is likely to be excessive, he/she should consider applying to the court either to relieve him/her of the duty to report or to authorise him/her to report in a different way, for example by advertising where a copy of the report can be obtained [note 9]. The official receiver should only consider making such an application where he/she is dealing with a case which has an exceptionally large number of creditors/contributories or where, for example, an administrator was appointed liquidator on the making of the order or a Secretary of State appointment was made on the day of the order. The application should also cover the seeking of relief from sending out individual notice of a meeting/no meeting [note 10].


18.6 Reporting where proceedings annulled, stayed or rescinded

Where winding up proceedings are stayed by order of the court or rescinded, or a bankruptcy order is annulled, the obligation on the official receiver to issue a report is removed. In a bankruptcy, however, the official receiver must contact everyone already notified of the making of the bankruptcy order to inform them that it has been annulled [note 11]. Whilst the official receiver is not compelled by the Rules to notify creditors in a winding up of a stay of proceedings or the rescission of the winding-up order, an early letter informing them of the position is likely to reduce the number of queries received. The official receiver should send notification of a stay of proceedings, rescission or annulment within two working days of the making of the order. A written form of notification should be used or sent to confirm notification made by telephone.


18.7 Form and content of report

(updated October 2013)

The report to creditors must be completed on the standard CAR A Form.

The practical aspects of the production of the report to creditors are addressed in the "Case Help Manual" Part Reports to creditors and in the Case Assessment Record guidance notes which is available on the intranet. There is little guidance in the Rules as to what should be included in the report. The CAR A form provides details of the information to be included, and further guidance can be found in the Part 4 of the Case Assessment Record Guidance notes.

The official receiver should provide an explanation as to why property declared in the proceedings cannot or will not be realised for the benefit of creditors. This would include where a company goes into liquidation and a floating charge over the company's assets exists which was created after 15 September 2003. Details of the prescribed part of the company's assets subject to the floating charge which are available for distribution to unsecured creditors under section 176A should be given in the report.

The bankrupt's or director's reason for the insolvency should also be disclosed so that creditors can compare this to their knowledge of events, and can inform the official receiver of matters of which he/she may not be aware and which might be relevant to the investigation decision. Where the official receiver disagrees with the reason for the insolvency given by the bankrupt or director, a statement should be added to the report to that effect, giving the official receiver's opinion on the reason for the insolvency [note 12] (see also paragraph 18.14.)

In a bankruptcy case, although the report should not specifically mention the proposed date of the bankrupt's discharge, it should contain sufficient information to enable creditors to form a view as to the bankrupt's suitability for early discharge ( this is only applicable to bankruptcy orders made prior to 1 October 2013) . This will assist creditors in deciding whether they wish to object to the bankrupt being discharged from bankruptcy before the one year period has elapsed, should they later receive notification under section 279(2) that the official receiver's investigation is unnecessary or concluded. For more information on the early discharge process see Chapter 22 Part 2 - Discharge from bankruptcy

When completing a report to creditors, the official receiver should always bear in mind that the matters that concern creditors the most are "Will I get paid?" and "What went wrong?", and the early provision of a report that answers these questions is likely to reduce the number of routine enquiries received.


18.8 Abridged CAR A forms for use in debtors bankruptcy cases

(updated October 2013)

Debtors petition bankruptcy cases are categorised as type 0, type 1 and type 2 cases. Type 0 cases are those where a view is taken, after reviewing the statement of affairs, that there is no further essential information to be gathered, the necessary recommendations can be made and instructions given without any need to contact the bankrupt, and an interview is unnecessary. Type 1 cases are those where the official receiver needs further information, but the matter is not complex, e.g. where there is a possible IPA/IPO or where a bankrupt has numerous credit card/loan creditors and the official receiver wishes to interview the bankrupt in order to clarify the period over which credit was incurred and what it was used to purchase. Type 2 cases are those debtor petition cases where a longer interview is needed for the official receiver to examine more complex issues. For information on the identification and definition of type 0, type 1 and type 2 cases see Chapter 15 Part 2 - Aims, conduct and processes of the official receiver's investigations. 

In suitable type 0 and type 1 debtors bankruptcy cases, the official receiver may complete the report to creditors on the abridged CAR A forms [note 13].

The abridged CAR A forms are suitable for use where;

  • the debtor has not traded,
  • there will be no meeting,
  • the case is suitable for early discharge (early discharge is not applicable to bankruptcy orders made on or after 1 October 2013 -see Chapter 22 Part 2), and
  • there is no immediate prospect of a distribution to creditors (although in cases where an IPA has been agreed to there may be a distribution to creditors in the future if the bankrupt makes the agreed payments.)

The history and cause of insolvency are combined in one paragraph in the abridged CAR A form. The official receiver should be able to give a sufficiently detailed summary of the cause of insolvency in no more than four sentences in most cases. An illustration of the level of detail required is as follows:

"In May 1994, following 12 successful years as a self employed electrician, my wife became ill and could no longer work. Since then being responsible for all of the household bills I have supplemented my income with the use of loans and credit cards until I could no longer make the repayments."

The abridged CAR A forms will not be suitable for use in every type 0 and type 1 case, and the official receiver should exercise his/her discretion within the guidelines given to decide whether the use of the abridged CAR A form is appropriate in each case. In all meetings cases and type 2 cases the standard CAR A form should be used.



18.9 Assets and liabilities - statement of affairs lodged prior to report

Where a statement of affairs has been submitted before the initial report to creditors is drafted, the report must contain a summary of the statement of affairs (as amplified, modified or explained [note 14]) with any comments the official receiver wants to make on it [note 15]. Where it is known that the statement of affairs does not accurately reflect the position, because, for example, further information has been supplied by the director/bankrupt or by creditors, it is permissible for the report to contain a summary of the correct information followed by a note that the summary is drawn from the statement of affairs and further information supplied.

Where an inaccuracy in the statement of affairs is discovered after the report is submitted and the inaccuracy is material to the case the official receiver may consider issuing a further report. See also Part 2.


18.10 Assets and liabilities -statement of affairs submitted subsequent to report

If a statement of affairs is submitted after a report to creditors is issued, but it contains no additional information which the official receiver thinks should be brought to the creditors’ attention, he/she is under no obligation to issue a further report [note 16].


18.11 Assets and liabilities -statement of affairs not required or obtained

In cases where the official receiver has not required a statement of affairs, or he/she or the court has released all relevant persons from the obligation to submit it [note 17], or its submission is still being pursued, the official receiver’s report should be sent out within the usual time constraints (see paragraph 18.3) and should normally contain a summary of the insolvent’s assets and liabilities compiled from information obtained in the course of inquiries, with any comments the official receiver might wish to make on that summary.

The release of an insolvent from the obligation to submit a statement of affairs gives rise to a reporting obligation unless a report has already been sent and the official receiver is of the opinion that there are no additional matters which ought to be brought to the creditors’ attention [note 18].


18.12 Note as to supply of useful information

At the end of the report a standard paragraph is included to encourage the provision of information to the official receiver at an early stage. An information sheet is also attached to the report which provides details of the type of information that might be useful to the official receiver.

If no matters are raised by recipients of the report and no matters for further investigation come to the official receiver’s attention during the course of his/her normal inquiries, it will be reasonable to assume that the case can, subject to any other necessary formalities, be closed. See also paragraph 18.8.


18.13 Cases warranting greater detail/deficiency account available

Where there is a very substantial deficiency or the case has generated creditor interest, the official receiver should consider giving a more detailed history than he/she would normally do. The official receiver should also do this when he/she is keen for information to be given to him/her by third parties or where the attitude of interested parties is known to be such that the provision of limited information would be likely to produce numerous telephone calls or letters requesting further details. The official receiver should also include a summary of any formal deficiency account obtained where this is available at the time the report is issued.


18.14 OR’s opinion on the reason for the insolvency and "privilege"

The official receiver’s views on the reason for the insolvency should generally only be included where they differ from those stated by the director/bankrupt and the expression of the official receiver’s opinion as to the reason for the insolvency is necessary to enable the recipients of the report to gain a proper understanding of the insolvency [note 19] (see also paragraph 18.8). In relation to any remarks he/she makes, the official receiver will enjoy the protection from defamation actions that the defence of qualified privilege affords him/her. The defence is available where there is a legal duty to make a statement to a person who has an interest in receiving it. It should be noted that third parties such as financial institutions, accountants, etc. must not be named in the report, however blameworthy they may appear to be, as this could result in legal action being taken against the official receiver.

The defence of qualified privilege would not be available if the official receiver was actuated by express malice in making his/her report. An act is deemed to be malicious if done intentionally, without just cause or excuse. If a person believes what he/she says is true and is not reckless, malice cannot be inferred from the fact that his/her belief is unreasonable, prejudiced or unfair, (Horrocks v Lowe [1972] 1WLR 1625, Affirmed by HL [1975] AC 135).

It should not, of course, ever be the case that an official receiver’s actions are activated by malice and consequently he/she should never be placed in a position where he/she might lose his/her protection from defamation actions, provided that his/her report does not stray beyond the bounds of what is required for a proper appreciation of the insolvent’s affairs (see also paragraph 18.15.)


18.15 Limited circulation

The official receiver’s report should only be given or copied to creditors or contributories (or, alternatively, their representatives, provided they have written authority from the creditor or contributory they represent, or the official receiver is otherwise satisfied that they have been retained by the creditor or contributory concerned). The only exception is the liquidator or trustee, if other than the official receiver, who is entitled to a copy of the report [note 20]. It should be noted that the Rules do not provide for other office-holders, for example an administrative receiver, to be provided with a copy of the report. Reports should never be given or copied to journalists or press agencies.

Prior to 6 April 2010 a company officer or a bankrupt could obtain a copy of the report through his/her right to inspect the court file and to take copies of documents on it [note 21]. The requirement to file the report at court ceased on 6 April 2010. The official receiver may provide a company officer or a bankrupt with a copy of the report to creditors upon request, but he/she must be satisfied as to the identity of the individual making the request . In these circumstances it would be sufficient to ensure that the requested report is sent to the address of the company officer or bankrupt known to the official receiver.

It may be that a company officer will in any event be a creditor or contributory of the company and in that case a copy of the report will be sent to him/her in that capacity in the usual way.

The official receiver may also receive requests for a report to creditors or a list of creditors from companies that are not creditors of any specific insolvent under the Freedom of Information Act 2000. Where the official receiver is holding information solely as a statutory office holder (for example as liquidator, receiver and manager or trustee) the Freedom of Information Act 2000 does not apply. This includes where the official receiver is holding a list of creditors and sending reports to creditors under rule 4.43(1) or rule 6.73(1). Where the official receiver is holding information solely as a statutory office holder disclosure of information should be made in accordance with the provisions of the Insolvency Act 1986 and other legislation. Any requests for a report to creditors or a list of creditors under the Freedom of Information Act 2000 from a individual or organisation that is not entitled to that information under the provisions of the Insolvency Act 1986 should be refused. For more information see Chapter 81 - Freedom of Information and Environmental Information and Chapter 81A – Data Protection.


18.16 Prior company failures

Where a director was previously a director of another company which was compulsorily wound-up and that company had a similar name to the current company the official receiver should consider including this information, which is a matter of public record, in the history paragraph of the report. Such action gives the potential for the creditors to become aware of their individual rights to pursue the director pursuant to section 217 [note 22]. When including such information, the official receiver should have regard to those instances which allow the proper reuse of the liquidated company’s name [note 23].

The official receiver should not actively encourage the creditors to take proceedings, neither should he/she attempt to provide legal advice.


18.17 Partnerships: winding-up order only

Where there is a winding up order against a partnership without insolvency orders against any of the members, the report should only contain details of the assets and liabilities of the partnership/a summary of the partnership statement of affairs, if appropriate, and the official receiver’s report on the partnership, which is treated as an unregistered company [note 24]. Details of the partners’ separate affairs should not be given in the report. CAR A forms for use in partnership cases can be found in the Case Help Manual Part Reports to Creditors.


18.18 Partnerships: partnership and one or more members subject to proceedings

Where there is a winding up order against a partnership and an insolvency order against one or more of the partners, separate reports should be prepared for each estate (i.e. the partnership and each member) for dispatch to the respective creditors [note 25]. Such action avoids the position of creditors being provided with information to which they are not entitled which could arise if a combined report were to be prepared. CAR A forms for use in partnership cases can be found in the Case Help Manual Part Reports to Creditors.



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